Why Short Sales And Foreclosures May Not Be The Deal You Think

August 4, 2011

It's not uncommon to hear new home buyers weighing their choice between a new home verses a great deal on short sales and foreclosures. And yes there are some great deals out there. But more often then not that great deal might really be a wolf in sheep's clothing. Foreclosures and short sales used to only attract serious investors with capital, time and resources to rehab a home. Just because everyone is talking about them - doesn't make it a good deal for you. Sometimes - the best "deal" isn't the best fit for you or your family. More often then not when you walk into a foreclosure you can tell you have some work ahead of you. You have several different categories of foreclosures and short sales. The Obvious fixer upper: These are the homes that are old and outdated. They may be a steal of a deal but you know you are going to dump money into it to update and change. If you are looking for a project, and you don't mind getting your hands dirty, at least you are usually prepared to take on this monster. New On the Outside, Abused on The inside: And then there are those new ones that are only 4-7 years old that look like they should be beautiful as you walk up the front pathway. But when you enter the door you see the results of an angry owner. These poor homes have holes in the walls, ripped out appliances and other markings of distress that you know you will need to improve. The Stealth Nightmare: These are the homes that either by intent or neglect have underlying problems you wouldn't be aware of by just looking at them on the surface. There have been instances where disgruntled homeowners have poured concrete down drains, pulled key pieces out of HVAC equipment or worse, things that you don't even want to see on carpets and walls. There are plenty of horror stories out there about what owners do to foreclosures. There is a good reason that there are million dollar businesses out there focused on cleaning out these homes. But then there are other problems that can come from a property that sits for a while without electricity, water or utilities turned on. You may need to check for mold, gas leaks, and in the winter pipes can freeze. When abandon for a while these are the perfect conditions for mice, rats, squirrels, roaches and bugs to take up residence. There are a host of problems that you wouldn't encounter with new home sales. If you dare to be brave enough to look into properties on auction, there are a myriad of nightmares associated with those homes. These types of sales are not for the novice, nor the faint of heart. There are situations - from owners who won't vacate the property to owners that have burned down the houses, bulldozed them and rammed trucks into them - all in order to prevent the bank and those that would pursue these properties from taking possession. All of this coupled with the fact that the short sale and foreclosure process can take many, many more months than a regular straight-forward sale, make it difficult if you have a time frame in mind for your move. Overall between the warranties, guarantees, and ability to personalize your own new home that no one else has ever lived in, the seemingly pro's of a good foreclosure deal are often beat out by the value of a better one, your own new home. Image source: ©PhotoXpress.com
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